Find the application of conversion costs

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Reference no: EM131845796

The Kwanika Co. operates in a lean manufacturing environment.

During its first year of operations, Kwanika budgeted for 40,000 hours in the production of 100,000 units in its cell X-22. Material costs were $7 per unit.

Cell X-22 conversion costs were budgeted for the year as follows:

Direct and indirect labor	$ 900,000
Machine depreciation	125,000
Maintenance and supplies	375,000
Utilities	225,000
Total	$1,625,000

During January, material for 8,400 units was purchased on account.

There were 8,200 units manufactured and 8,000 were sold shipped to customers for $35 each. Journalize:

(a) the material purchases;

(b) the application of conversion costs;

(d) the sales (were made on account) and associated cost of goods sold for the month of January.

Reference no: EM131845796

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